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PUBLIC LAW 85-866-SEPT. 2, 1958
[72 S T A T.
SEC. 12. LIMITATIONS ON CHARITABLE CONTRIBUTION DEDUCTION. 26 USC 170.
(a)
REDUCTION FOR CERTAIN INTEREST.—Section 170(b)
(relating
to limitations on deduction for charitable, etc., contributions and gifts) is amended by adding after paragraph (3) (added by section 11 of this Act) the following new paragraph: "(4) REDUCTION FOR CERTAIN INTEREST.—If, in connection with any charitable contribution, a liability is assumed by the recipient or by any other person, or if a charitable contribution is of property which is subject to a liability, then, to the extent necessary to avoid the duplication of amounts, the amount taken into account for purposes of this section as the amount of the charitable contribution— " (A) shall be reduced for interest (i) which has been paid (or is to be paid) by the taxpayer, (ii) which is attributable to the liability, and (iii) which is attributable to any period after the making of the contribution, and " (B) in the case of a bond, shall be further reduced for interest (i) which has been paid (or is to be paid) by the taxpayer on indebtedness incurred or continued to purchase or carry such bond, and (ii) which is attributable to any period before the making of the contribution. The reduction pursuant to subparagraph (B) shall not exceed the interest (including interest equivalent) on the bond which is attributable to any period before the making of the contribution and which is not (under the taxpayer's method of accounting) includible in the gross income of the taxpayer for any taxable year. For purposes of this paragraph, the term 'bond' means any bond, debenture, note, or certificate or other evidence of indebtedness." (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to taxable years ending after December 31, 1957, but only with respect to charitable contributions made after such date. SEC. 13. AMORTIZABLE BOND PREMIUM. 26 USC 171.
(a) AMORTIZATION OF PREMIUMS W I T H CALL DATES.—Section
171
(b) (relating to amortizable bond premium) is amended— (1) by striking out subparagraph (B) of paragraph (1) and inserting in lieu thereof the following: " (B)(i) with reference to the amount payable on maturity or on earlier call date, in the case of any bond other than a bond to which clause (ii) or (iii) applies, "(ii) with reference to the amount payable on maturity (or if it results in a smaller amortizable bond premium attributable to the period to earlier call date, with reference to the amount payable on earlier call date), in the case of any bond described in subsection (c)(1)(B) which is acquired after December 31, 1957, or "(iii) with reference to the amount payable on maturity, in the case of any bond described in subsection (c)(1)(B) which was acquired after January 22, 1954, and before January 1, 1958, but only if such bond was issued after January 22, 1951, and has a call date not more than 3 years after the date of such issue, and"; and (2) by striking out, in the second sentence of paragraph (2), the.phrase "In the case of a bond described in subsection (c)(1) (B) issued after January 22, 1951, and acquired after January 22, 1954, which has a call date not more than 3 years after the date of such issue," and inserting in lieu thereof the following: "In the case of a bond to which paragraph (1)(B) (ii) or (iii) applies and which has a call date,".
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